(a) Call writers are squaring up their positions at 360CE 28 June 2018. You can see OI for that CE is down by 10,200. This implies that the writers are afraid to short the 360CE and therefore the chances of the stock moving higher look bright.

(b) Call writers are happy about selling 380CE, 400CE and higher CEs for the same expiry implying that they don’t see the stock moving beyond 380-400 up to 28 June.

(c) Put writers are unafraid of writing 360 and below PEs, and you can also see that most Put buyers have lost money (while most CE buyers have made money). This implies that the writers don’t see the stock falling much from current levels up to 28 June.

Therefore, Star or Strides Shasun looks like a bullish trade in the short term (BTST to 4-5 days). Of course, with a strict stop loss.

Now, we have a probable trades for Monday and so set up the charts.

STEP 3: SET UP THE CHARTS

Let’s make a list of all the stocks mentioned above to check on the charts on Monday.

Notice that all the stocks that you have added in the portfolio get featured on the right.

You can add as many stocks as you like and keep deleting stocks that no longer interest you.

STEP 4: ANALYZE THE CHARTS

As an example I’ve analyzed Strides Shasun 1-Hour chart as this period is ideal for a swing trade analysis.

Here’re my observations:

Supertrend indicated a buy at 358 and the stock hit 370+ before reacting back to 357. In any case, SuperTrend gives good entries but is late on exits.

The 20 EMA is still below 50 EMA and this is not a bullish sign.

The price is below the Ichimoku cloud, base lines and the EMAs. This data implies that the stock is in a downtrend.

The 1-Day and 1-Week charts too suggest that the stock is in a bear grip.

The MACD line is drooping as well. Not a good sign.

The Options Chain, on the other hand, indicates bullishness and the possibility of the stock hitting between 360-380 in the short run.

The OI data too is bullish.

The charts are contrasting with the Options and OI data. Typically, the action starts in the derivatives before hitting the cash market.

So, while it makes sense watching Strides Shashun on the charts, it also makes sense to try a long strangle in the options by buying PE and CE at ITM (In The Money) prices. This is because Strides Shasun looks very volatile give the divergent views of the derivatives and the charts data. This post helps you understand what a long strangle is.

STEP 5: USING THIS SETUP

Revise the setup at the end of day, before every trading day.

Be ready with list of stocks at 9.15 AM and by then you should know the stocks with the highest potential to move either way.

Start checking the OI and Options Chain data every 15 minutes starting from 10.30 AM for OI and 10 AM for the Options data.

Keep adding or deleting stocks to the Investing.com portfolio per your analyses.

Keep analysing charts by switching between stocks. Additionally you can set up alerts per stock so that you know when stock prices touch your target.

Repeat.Perform a few paper trades to get a hang of this style. Good luck.

As per above 540 CE writer squaring off position and 520 PE writter squaring off position.

As pee highest OI 600 CE and 540 PE both writter writing call as well as put side.
It means as per EOD sunpharma can go below 540 not more than 520 same time not going above 600 it is correct sir
If I am wrong please kindly correct me
Thanks

Hi sir i need your help in analyzing infibeam incorporation ltd. currently price is trading in a flat range between 149 to 156. big volumes are coming and delivery percentage is also rising future oi has reduced in past three days options data showing more ce’s are being covered. my doubt is can we expect volatility in coming days and do long strangle. please give your view on this sir